HONG KONG — Hong Kong's finance chief predicts the southern Chinese financial city will have a "modest economic recovery" in 2013 as he unveiled measures to boost growth and bolster employment in his latest budget.

Financial Secretary John Tsang said it will be a "challenging year" for Hong Kong, an Asian financial center that is highly dependent on trade.

He cited factors including the "slow" economic recovery in the U.S., European economies hit by recession and uncertainty over whether Japanese government's stimulus measures will be successful.

Tsang forecast Hong Kong's economy to grow between 1.5 percent and 3.5 percent in 2013, after it scraped out a 1.4 percent expansion last year.

Hong Kong is a former British colony that's now a semiautonomous region of China.